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Development Cost Comparison Study - popcdn.azureedge.net

Brownfield/GreenfieldDevelopment cost Comparison StudyE X E C U T I V E S U M M A R YDecember 2004 Prepared for:Port of PortlandPortland Development CommissionCity of PortlandMETRO H:\PROJECTS\204010400\WP\ PROJECT TEAM Port of Portland Greg Theisen Portland Development Commission Elissa Gertler Rashid Ahmed City of Portland- Bureau of Planning Steve Kountz METRO Lydia Neill Consultant Team Group Mackenzie Mark Clemons Project Management / Geraldene Moyle Site Development Case Studies Bob Thompson Johnson Gardner Jerry Johnson Financial Analysis Bill Reid ERM Bob Carson Brownfield Characterization Analysis Dave Einolf Renova Partners Susan Hollingshead Brownfield Redevelopment Advisors Michael McMullen Exhibits H:\PROJECTS\204010400\WP\ 2 1. EXECUTIVE SUMMARY PROJECT OVERVIEW The availability and location of industrial land as a resource for the creation of new employment is a major economic and policy issue throughout the State of Oregon and the Portland metropolitan area.

Development Cost Comparison Study E X E C U T I V E S U M M A R Y December 2004 Prepared for: Port of Portland Portland Development Commission City of Portland ... premium, assumed to be 0.5% of total developmentcosts based on the perceived …

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1 Brownfield/GreenfieldDevelopment cost Comparison StudyE X E C U T I V E S U M M A R YDecember 2004 Prepared for:Port of PortlandPortland Development CommissionCity of PortlandMETRO H:\PROJECTS\204010400\WP\ PROJECT TEAM Port of Portland Greg Theisen Portland Development Commission Elissa Gertler Rashid Ahmed City of Portland- Bureau of Planning Steve Kountz METRO Lydia Neill Consultant Team Group Mackenzie Mark Clemons Project Management / Geraldene Moyle Site Development Case Studies Bob Thompson Johnson Gardner Jerry Johnson Financial Analysis Bill Reid ERM Bob Carson Brownfield Characterization Analysis Dave Einolf Renova Partners Susan Hollingshead Brownfield Redevelopment Advisors Michael McMullen Exhibits H:\PROJECTS\204010400\WP\ 2 1. EXECUTIVE SUMMARY PROJECT OVERVIEW The availability and location of industrial land as a resource for the creation of new employment is a major economic and policy issue throughout the State of Oregon and the Portland metropolitan area.

2 A number of efforts have occurred or are currently underway to understand and address this issue. As part of this ongoing regional discussion on industrial land, a consortium of public agencies (the Port of Portland, Portland Development Commission, METRO and the Portland Bureau of Planning) sponsored this Brownfield/Greenfield Development cost Comparison Study . The goal of the project is to provide the project sponsors with a better understanding of costs and issues associated with industrial Development of greenfield sites and the redevelopment of brownfield sites. In addition, a methodology was developed that calculates and compares brownfield and greenfield Development costs. The challenge was to develop a model that could be replicated in future studies. Therefore, the uses could change and the sites could change, but the methodology would remain constant.

3 Using a case- Study approach, the project compared the public and private Development costs associated with specific industrial projects between brownfield sites and greenfield sites. Four types of industrial Development projects were identified: general manufacturing, high tech, warehouse and distribution, and industrial park. A specific profile and site plan for each use was completed. Four greenfield sites and three brownfield sites were also identified. The site plan for one of the uses was then tested on one greenfield and one brownfield site. An analysis of costs was then prepared for each project on the two sites. METHODOLOGY Uses Four industrial uses that were appropriate for the Portland metropolitan area were identified. High Tech Manufacturing includes high technology industries that are primarily related to manufacturing and processing.

4 In this Study , a 350,000 SF high-tech facility is tested that includes two 125,000 SF fabrication plants, one 40,000 SF central utility building, one 60,000 SF office building and 725 parking spaces. Industrial Park is a series of larger individual buildings whose uses could include light industrial manufacturing, distribution or industrial services. For this project, 630,000 SF of industrial park space, divided into multiple buildings, was tested on both sites. Warehouse / Distribution includes industries primarily engaged in the warehousing, storage and distribution of goods. For this project, 400,000 SF of distribution space in a single building with 200 parking spaces and 300 trailer spaces was tested on both sites. Exhibits H:\PROJECTS\204010400\WP\ 3 General Manufacturing includes industries utilizing manufacturing processes.

5 For this project, three single-user general manufacturing facilities were tested on each site. These facilities totaled 450,000 SF in three buildings a 100,000 SF user, a 150,000 SF user, and a 200,000 SF user and 1,100 parking stalls to serve all three facilities. Site Selection Since the goal of the Study was to compare costs for industrial projects, it was necessary to identify sites appropriate for the user profiles based on size, zoning and location. Additional issues considered in choosing the sites included distribution around the region, extent of brownfield contamination, adjacency to the Urban Growth Boundary, surrounding industrial uses, level of existing infrastructure, and specific needs of the identified uses. Brownfield For this Study , appropriate sites needed to be over 25 acres and zoned industrial.

6 While the overall inventory of brownfield sites in the region is significant, with over 1,100 acres of vacant land listed in the City of Portland s Brownfield Site Inventory; the availability of large, viable brownfield sites in industrial areas in the region is limited. In addition, certain sites were identified and eventually discarded for reasons of concern about the market impacts of inclusion in the Study and for potential liability issues1. While the goal was to identify four brownfield sites to include in the Study , at the end only three sites were used. To compensate and still meet the original goals of the Study , two different uses were put on one of the brownfield sites. Greenfield Four sites were selected in the Portland metropolitan region. Three of the sites are in areas where land was recently brought into the Urban Growth Boundary (UGB).

7 One site is located within the existing UGB. The sites range between 70 and 350 total acres. Therefore, only portions of each of the greenfield sites were used for each conceptual site plan. The following table provides site overviews, and the uses proposed on each: Use Site Type Site Size (acres) Building Area (SF) Parking Stalls Brownfield 350,000 725 High Tech Manufacturing Greenfield 350,000 725 Brownfield 630,000 1,130 Industrial Park Greenfield 630,000 1,130 Brownfield 400,000 200 Warehouse / Distribution Greenfield 400,000 200 Brownfield 450,000 1,100 General Manufacturing Greenfield 450,000 1,100 As the Study progressed, issues relating to liability and publicity were raised and concerns were expressed regarding the identification of actual brownfield sites in the report. It was determined that the brownfield sites should be generic in the final report.

8 To make all the 1 Some sites that were initially considered for inclusion in the Study are currently being actively marketed for sale. The site owners indicated that they were not comfortable including their properties in this Study due to potential stigma and negative sale price impacts to their properties, regardless of the author s intentions to conceal the identities of individual sites. Exhibits H:\PROJECTS\204010400\WP\ 4 sites equal, it was then decided that the greenfield sites would also be made generic. Therefore, while actual sites were utilized, for the purposes of this Study , all geographic identifying features have been removed. Costs The primary focus of this Study was on quantifiable costs, including hard and soft costs both on-site as well as off-site.

9 The cost information was classified into four major categories: On-Site Construction Costs On-site construction costs include all building costs and on-site infrastructure and parking costs, plus additional on-site costs, including site grading, lift stations, tank removal and pilings associated with several of the brownfield and greenfield sites. System Development Charges (SDC s) and Credits Large, one-time user fees paid with the Development of the site were included in this category. This includes System Development Charges (SDC s) for sanitary sewer, water, storm drainage, street improvements and parks. SDC credits were based on the extent of existing Development on the site. Off-Site Construction Costs These are the costs associated with the public utilities, including sanitary sewer, water and storm drain mains, necessary to accommodate the build-out of each concept.

10 The delivery of private utility (electric, natural gas, telecommunications) costs were not identified separately, and were assumed as part of the estimated street costs. Major utility upgrades, such as substations, transformers, water reservoirs, and treatment facility expansions were not included (the presumption is that SDC fees are intended to finance these public facility expansions). Environmental Remediation Costs (Brownfield Sites Only) The potential environmental remediation requirements for each site were based on publicly available information and the project team s experience with similar properties. The estimated costs represent the minimum estimated effort required to obtain a No Further Action (NFA) letter from the Oregon Department of Environmental Quality (DEQ) for the properties.


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